Question 71

The company should file a mechanic's lien to obtain the balance.

A mechanic's lien is specifically designed for contractors and suppliers who have not been paid for work completed on a property. In this scenario, since the company built an addition to the house and the owner refused to pay, filing a mechanic's lien is the appropriate legal action to secure payment.

A) judgment lien

A judgment lien is created when a court orders a debtor to pay a creditor and is typically based on a court judgment for money owed. This type of lien does not apply in this case, as the situation arises from a contract for services rather than a court judgment.

B) general lien

A general lien is a claim against all property owned by a debtor, rather than a specific property. While it may apply in some contexts, it is not suited to the specific scenario of unpaid work on a property, making it an incorrect choice for this situation.

C) mechanic's lien

A mechanic's lien is the correct type of lien to file in this situation because it is specifically intended for contractors, subcontractors, and suppliers who have not received payment for work done on real property. This lien directly addresses the owner's refusal to pay the balance of the contract price for the addition built on the house.

D) condemnation lien

A condemnation lien is related to the government taking property for public use, typically with compensation provided to the owner. It is not relevant in the context of a private contract dispute over construction work and thus is not applicable here.

Conclusion

The mechanic's lien is the most appropriate legal recourse for the company in this situation, as it directly addresses the non-payment for construction services provided. Other options like judgment lien, general lien, and condemnation lien do not pertain to the contractual relationship and the specific nature of the unpaid balance for work completed. Therefore, the mechanic's lien is the definitive choice for securing payment.